The Use of Social Media for Financial Services Companies

We have all heard of the power of social media to transform internet start-ups into online juggernauts, and the far-reaching impact of a proper social media platform on a company’s brand cannot be denied.

Consumer brands have fully embraced the latest trends, but can the same be said for financial services companies?

Benefits are difficult to measure

As the benefits are much more difficult to measure for financial services companies, more and more companies are being asked to truly explain the effectiveness of social media.

The hesitation in adopting a more sustained social media strategy, in part due to the fact that tangible results are difficult to define, is widespread among many financial services companies. Companies that may have tried using Twitter or Facebook to build brand recognition are now abandoning those strategies and turning back to more traditional forms of communicating with the public.

There are countless stories of inappropriate pictures or tweets from companies that use social media, and these miscues can be crippling for a company looking to build a consistent image. The public will always remember the mistakes a company makes and rarely recognize the good messages that are communicated.

As a result, companies are more wary of minimizing their downside risk with any missteps and instead focused on communicating a single unified message.

One real benefit that social media gives a company is…

A wide range of statistics and information related to company reputation, brand image and performance measurement.

Many of these statistics are completely foreign to traditional competitive intelligence departments and a consistent data mining process is now needed to properly digest this plethora of information available.

The real challenge of financial services companies

Perhaps that is the real challenge of financial services companies – being able to develop a corporate strategy to consistently track and retrieve information gathered from benchmarking statistics related to social media.

A company deciding to implement a social media strategy must first ask itself what the benefits might look like. If they are not able to track and measure those benefits, it is ineffective to employ such a strategy. Not only will results be difficult to measure, even if a strategy is effective the company will have no way to understand and track what the benefits of such a strategy would look like.

With proper analysis more and more firms will be able to answer whether or not social media is a worthwhile tool or merely a passing fad.